Because there are many firms with similar products in purely competitive markets,
A) price is determined by the laws of supply and demand.
B) consumers develop personal preferences.
C) firms find it easy to build strong, distinct brands.
D) advertising is heavily used.
E) the many competitors will focus on variable cost pricing.

Question

Quizplus · Accepted Answer

In purely competitive markets, no firm has enough market power to influence the market price. As a result, the firms have to accept the market-determined price, which is determined by the intersection of supply and demand.

Because There Are Many Firms with Similar Products in Purely